Agreement Corporation


DEFINITION of 'Agreement Corporation'

A type of bank chartered by a state to engage in international banking. The bank "agrees" with the Federal Reserve Board (FRB) to limit its activities to those allowed an Edge Act corporation.

BREAKING DOWN 'Agreement Corporation'

In 1916, Congress passed the Agreement Corporation Act, which gave national banks the right to invest a portion of their capital and surplus in state-chartered banks and corporations that would conduct international business. The state-chartered bank had to enter into an agreement with the FRB to be bound by its rules and regulations.

The Agreement Corporation Act produced little activity, so in 1919 Congress passed the Edge Act that authorized the FRB to charter corporations to engage in international banking. Both laws have undergone many changes since passage, and many of their restrictions have been relaxed.

  1. National Bank

    In the United States, a commercial bank chartered by the comptroller ...
  2. Chartered Bank

    A financial institution whose primary roles are to accept and ...
  3. Edge Act Corporation

    A banking institution with a special charter from the U.S. Federal ...
  4. Federal Reserve Board - FRB

    The governing body of the Federal Reserve System. The seven members ...
  5. Federal Reserve System - FRS

    The central bank of the United States. The Fed, as it is commonly ...
  6. Remittance

    The term most commonly refers to money being sent via mail or ...
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